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Lane, JD, CFP, MBA, CRPS

Category: Tax

Satisfied Customers: 10149

Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

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I am curious to figure out if we have Nexus and

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Hi, I am curious to figure out if we have Nexus for sales and use tax in certain states. My business is incorporated as an LLC in CA and my only physical office (warehouse) is in CA. I have employees in CA, TX, NC, FL, PA, TN, WA, NJ and CT.The employees in WA, CA, and TX perform marketing activities distributing promotional materials to OBGYN practices. They do not sell product to these OBGYN offices but the purpose of the promotional materials is to get in the hands of the direct consumers to create a sale to customers within those states.My employees in TN and PA are call center reps who take calls customer support calls and also take orders from customers across the USA.My employees in FL, NC and CT are all back office people who have no direct contact with customers. They process claims with insurance plans.Finally, I am the owner of the company and I reside in NJ.Based on the distribution of my employees and their roles in the company do I have Nexus for sales and use tax in all these states?Thanks!Joy

Hi Joy,...Looks like no one's picking this up. Maybe I can help...(answer to follow in just a moment)...Lane......I hold a law degree (JD, Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP&reg; and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate, both for-profit and non-profit, and tax advice, since 1986

Although the only way to be completely certain is to do the legal research here (look at the sales tax code (law) of each state, it's highly likely that your intuition is good (I'm assuming based on the way you asked the question)...In SOME states nexus can be created for much less connection than you have. But in every state I've looked at over the years, having a payroll in a state is a very sure indication of Nexus for sales tax purposes....Sales tax nexus occurs when your business has some kind of connection to a state. All states have a slightly different definition of nexus, but most of the time states consider a “physical presence” creates nexus....Physical presence can mean a number of things, including:Having an officeHaving an employeeHaving a warehouseHaving an affiliateStoring inventoryDrop shipping from a 3rd party provider that does business or has business assets in that stateTemporarily doing physical business in a state for a limited amount of time, such as at a trade show or craft fair...The fact that some of the individuals do not perform sales functions isn't relevant

Using that tool, here's Tennessee, for example...Tennessee considers a seller to have sales tax nexus in the state if you have any of the following in the state:“Corporate Presence”An employee present in the stateLease or rental of tangible personal propertyOwnership of real or personal propertyIndependent contractors or other representatives in Tennessee

Washingtin (again, this is not authoritative ... although some of the states' actual code can be accessed from here:...Washington considers a seller to have sales tax nexus in the state if any of the following applies to your business:Soliciting sales in this state through employees or other representativesInstalling or assembling goods in this state, either by employees or other representativesMaintaining a stock of goods in this stateRenting or leasing tangible personal propertyProviding servicesConstructing, installing, repairing, maintaining real property or tangible personal property in this stateMaking regular deliveries of goods into Washington using the taxpayer’s own vehicles

Some states have an "Out of State Businesses" site, which can be very helpful (although not as good as the ideal (reading the actual code) can reasonabley be relied upon, because it's the State's Dept of Revenue that's publishing:...here's Washington's: http://dor.wa.gov/content/DoingBusiness/BusinessTypes/doingBus_OutOfStBus.aspx#Nexus

Here's TX, again these are just overviews:...Texas considers a seller to have sales tax nexus in the state if you have any of the following in the state:An office or place of businessAn employee present in the stateA place of distributionA warehouse or storage spaceA sales or sample roomOr another place where business is conducted

North Carolina considers a seller to have sales tax nexus in the state if you have any of the following in the state:An office or place of businessEmployees, independent contractors, agents, or other representatives“Any place of distribution, sales or sample room, warehouse or storage place, or other place of business” that you maintain, use or occupy either directly or indirectly, temporarily or permanently

Pennsylvania considers a seller to have sales tax nexus in the state if you have any of the following in the state:An office or place of businessAn employee present in the stateGoods in a warehouseOwnership of real or personal propertyDelivery of merchandise in PennsylvaniaIndependent contractors or other representatives in PennsylvaniaLeasing property in the state

Connecticut considers a seller to have sales tax nexus in the state if you have any of the following in the state:An office or place of businessAn employee present in the state for more than 2 days per yearGoods in a warehouseOwnership of real or personal propertyDelivery of merchandise in Connecticut in vehicles owned by the taxpayerIndependent contractors or other representatives in Connecticut for more than 2 days per year

New Jersey considers a seller to have sales tax nexus in the state if you have any of the following in the state:An office or place of businessAn employee present in the stateGoods in a warehouseOwnership of real or personal propertyDelivery of merchandise in New JerseyIndependent contractors or other representatives in New JerseyProvide any maintenance program in New Jersey

Seeing a theme here?...I hope this has helped...Please let me know if you have any questions at all....If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit”)…I receive no crediting at all unless you rate in this way....Thank you!Lane……I hold a law degree (JD, Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP&reg; and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate, both for-profit and non-profit, and tax advice, since 1986

Hi Joy,...Did you see my answer?...Maybe this was too much info all at once?...I'll make an additional services offer for the least amount possible ($5) so that we can go over the one the phone or via email directly.